The production of transgenic mice constitutes a new and powerful approach to the study of gene function and regulation. We have used this nsw technology to begin to investigate two important aspects of cancer progression: the ability of malignant cells to escape destruction by chemotherapy, and the role of proto-oncogenes in the initiation of the transformed phenotype. A gene (MDR1) encoding a multidrug transporter (P-170) capable of conferring multidrug resistance was microinjected into one-cell mouse embryos and germ line transgenic mice established. Expression of the MDR1 gene was detected in the normally drug- sensitive bone marrow. Studies are underway to determine if transgenic mice overexpressing the MDR1 gene in bone marrow are more resistant to chemotherapy. The epidermal growth factor (EGF) receptor is the cellular homolog of the avian erythroblastosis virus erbB oncogene product. To elucidate the role that the EGF receptor plays in normal and transformed cells, we generated transgenic mice that carry germ line-integrated EGF receptor genes. These mice are being analyzed for EGF receptor gene expression, and scrutinized for the appearance of cancer.